Deliberate policy?

The UK has been amongst the biggest centres for money laundering since the deregulation of the City of London in the 1980s. This is a consequence of the largely unregulated financial sector and the myriad enablers and facilitators of corruption and money laundering, including the large audit firms, legal firms and consultants.

The Canary asked Feinstein about the government’s “ambitious new partnership to fight economic crime” called the National Economic Crime Centre. The campaigner and former politician said:

I have no faith in this government meaningfully tackling this problem as these facilitators and enablers are amongst their biggest political donors. Attempts to streamline legal enforcement on this issue have been characterised by illogical decisions and appalling implementation.

He continued:

This will be made worse by a post Brexit environment in which the government envisages the UK becoming an even less regulated offshore haven. There is simply no political will to address the issue, as a consequence of which Britain will, if anything, become an even greater enabler of global corruption and money laundering.

‘Many hundreds of billions’

assesses that many hundreds of billions of pounds of international criminal money is laundered through UK banks, including their subsidiaries, each year.

So if anything, the Home Office may have vastly understated the amount of illegal funds cleansed through the City of London. From “many hundreds of billions” to ‘at least tens of billions’. Yet the Conservative chancellor Philip Hammond recently praised The City for its contribution to the country:

The day before the Chancellor gave this speech, praising the City of London to the skies, his govt admitted that the scale of money laundering through the City was “at least in the tens of billions of pounds”. https://t.co/S52HnlNFrDpic.twitter.com/79VGxYpa6f

Tax Evasion and Money Laundering

In January 2013, a European Parliament select committee published a report on the link between tax evasion and money laundering. The report said:

tax evasion provides incentives to established financial institutions as well as authorities or politicians to engage in corrupt activities, in quest of their own enrichment or other benefit. Financial institutions/banks are interested in increasing their profits by making use of this stream of funds, even if that implies circumventing the existing rules.

By design

This means that the mechanisms financial institutions and accountants create to evade tax are inevitably used to facilitate money laundering. This is made worse by countries ‘racing to the bottom’ to offer ever lower corporate tax rates.

The UK corporate tax rate is currently 19%, the lowest on record, down 33 percentage points from the peak rate of 52% in 1982. The rate is set to drop to 17% in 2020.

These latest figures show money laundering is a massive problem. Surely it’s time for people to come together and tackle systemic corruption once and for all.

Get involved

Write to your MP and demand they take action on large scale tax evasion and money laundering (always be concise, specific and respectful to be effective)

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